IAEEL newsletter 1/94

Brazilian Utilities : Households in Focus

http://www.iaeel.org/IAEEL/NEWSL/1994/ett1994/PrN_b_1_94.html

Residential lighting is being viewed with increased interest by Brazil 's large electric utilities. Guest writer Gilberto de Martino Jannuzzi reports on three pilot programs and the country's first full-scale residential lighting DSM program.

When it comes to efficient lighting, residential consumers in Brazil have, traditionally, not received much attention from electrical utilities except in the form of educational and information campaigns.

However, by focusing more actively on the residential sector, significant gains can be made by the utilities. The reason is that the residential sector represents 20-35% of yearly electricity sales and accounts for about 35% of the evening peak demand of a typical Brazilian utility. Residential lighting is estimated to account for about 4% of the total electricity consumption in the country. However, it may account for as much as 10% of the evening peak demand. About 280 million incandescent lamps are in use in this sector, providing 95% of residential lighting services. Thus, the potential for efficiency improvements is great.

Nearly 70% of Brazilian households consume less than 1800 kWh/year, which is low by international standards. Nonetheless, these households are interesting targets for lighting programs because they have fewer lamps and use the lamps they have more intensively as compared with households with higher consumption. Another important factor is that the electricity tariffs of low-income/low-consumption households are subsidized.

THE PILOT PROGRAMS

• The first residential pilot program was run in 1990 by CEMIG, the main electric utility in Minas Gerais State . With support from the National Electricity Conservation Programme (PROCEL), 3000 incandescent lamps were replaced by 9- and 13-W electromagnetic compact fluorescent lamps ( CFLs ) in 514 households close to a distributing substation. One objective of this program was to better understand the impacts of CFLs on the distribution system. Electricity consumption was monitored at the substation and at individual households. A main concern was the low power factor (PF) of CFLs on the market. (In 1990, the average PF was 0.56, and recent measurements indicate that this figure has not changed.) To improve consumer acceptance of the CFLs , special luminaires were also installed.
  
  An evaluation showed that only some 60% of the households were satisfied with their CFLs . This dissatisfaction was primarily related to their insufficient light output. The CFLs ' impact on the distribution system is still under evaluation.
• A second program was run in 1992 by Sao Paulo Light and Power (CPFL) in Sao Paulo State . Here, 400 incandescent lamps of 60- and 100-W ratings were replaced by 22- and 32-W, electronically ballasted, circular fluorescent lamps installed by the utility at no cost to the consumer.
  
  A stratified sample of households was selected based on their monthly electricity consumption. The program targeted kitchen lighting exclusively since a field study had indicated that this is where lighting is used most by the average Brazilian consumer. Kitchen lighting use also tends to coincide with the system evening peak. In 40 households, where a metering system precisely recorded when the lamps were actually used, the instantaneous maximum lamp-coincidence rate at peak hours (6-9 PM) was found to be 67%. (In other words, at some point during this three-hour peak period 67% of all kitchen lamps were in use.)
  
  Twenty lamps were also tested in a laboratory to measure light depreciation, lifetime, harmonic distortion, and the power factor.
  
  Almost 90% of the participating households declared that they considered the lamps better than the incandescents previously used, mainly because the new lamps offered higher lighting levels.
• The third program was run in 1993 by the Energy Company of Sao Paulo (CESP), another state-owned utility. In this program, the utility supported a marketing effort in four towns jointly with the four main lighting manufacturers. The lamp manufacturers sold 9-W electromagnetic CFLs at a 30% discount in the local market. The utility was responsible for marketing and customer assistance during the campaign.

About two percent of the eligible households participated in the program (somewhat fewer than 1500 households bought a total of 1600 lamps). Many participating customers declared their intention to buy more CFLs , and post-program sales at regular lamp prices have also increased. The utility is currently evaluating the program.

COSTS AND BENEFITS
According to CEMIG's evaluation the utility benefits economically in cases where lamps are operated at least one hour daily. They also concluded that the consumer would benefit by using lamps at least 3 hours daily (it is important to note that the CEMIG study used a 12% annual discount rate for investments made by consumers; the same factor was used to analyze the utility's benefits).

The CPFL program results paint a very promising picture for the utility: The estimated cost of conserved electricity achieved by substituting a 22-W circular fluorescent lamp for a 60-W incandescent is US$0.06/kWh, if the utility pays the full costs of the substitution. In the case of the 32-W lamp the cost is only $0.03/kWh. This is very attractive to the utility since it pays $0.255/ kWh to the supplier for electricity at peak hours, which is four to eight times the cost of conserving the energy.

It costs the utility $886 to reduce peak demand by one kW in the case of the 22-W lamp ($495/kW with the 32-W lamp). These costs are very competitive with the present costs of new installed capacity in Brazil which range from $1800 to $3000/kW.

Analyzed from the perspective of the consumer, there is no benefit with the present tariffs and full equipment costs. A reduction in equipment costs of at least 70% is required to achieve a positive benefit.

READY FOR LARGE-SCALE PROGRAMS
Thus, CPFL sees financial advantages in reducing peak demand and is also the first Brazilian utility to turn its pilot-program experience into a full-scale program. This program will offer coupon rebates to ~50000 participating consumers in its service area. The rebate, in combination with a special program price offered by the lamp manufacturers, will cut CFL retail prices by an average of 50%. At this final price, both the utility and participating consumers should benefit. The utility will allocate $300000 to spend on customer rebates.

Lighting programs in Brazil have a bright future. There is great potential for developing these programs, so that they can compete with traditional supply options. Consumers are receptive to the new technologies. The high initial costs of more efficient lighting equipment, low residential tariff levels, and low income levels of the Brazilian household demand more aggressive initiatives from utilities, government, and lamp manufacturers to implement financially sound programs. In this way, future electricity requirements could be met at lower societal costs and with less harm to the environment.

See also: Brazil: growing market (IAEEL 1/94). Gilberto de Martino Jannuzzi

The author is a professor of energy studies at the University of Campinas, Brazil, and edits the electronic newsletter ENews which focuses on energy issues in developing countries.

Address :

Univ. Estadual de Campinas, Dept. Energia ,,
C.P. 1622, 13083-970 Campinas,
São Paulo, Brazil
Fax: +55 192 39 37 22
E-mail: jannuzzi@fem.unicamp.br